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Salt Lake City finance projects relatively flat sales tax, reduces fund‑balance draw by $14M for FY25‑26
Summary
Deputy budget director Andrew Reed told the council the general fund is still driven by property and sales taxes, that use of fund balance has been reduced by about $14 million, and that the administration remains conservative on sales‑tax projections while monitoring economic uncertainty.
Salt Lake City's finance staff updated the council on revenue assumptions for the FY25‑26 budget, reporting that property and sales taxes remain the largest revenue sources and that the city has reduced its planned draw on fund balance by roughly $14 million compared with the prior year.
Deputy Budget Director Andrew Reed presented a revenue overview and said property tax and sales tax make up roughly 65–68% of general fund revenues, depending on whether fund balance is used. He said the city is "very conservative" in sales‑tax forecasts and uses state and sector forecasts to guide projections. Reed said the city is budgeting a new ongoing increment from the Inland Port Authority and that rising electricity rates (Rocky Mountain Power) helped boost sales‑tax receipts in some sectors.
Why it matters: Sales‑tax receipts drive a substantial portion of the general fund. Reed told the council projections are conservative because of economic uncertainty, and the forecast reflects both sectoral performance (accommodations, food services, wholesale trade) and rising utility bills in the near term. He also noted a lower current utilization rate in the city's homeless system (discussed elsewhere in meeting) and changes in permit and parking meter revenues that affect general fund projections.
Other points raised in the briefing: - The city projects roughly $9 million more revenue in the current year than originally budgeted, driven by personal property tax growth and other receipts. - Licenses and permits showed a projected reduction that staff will follow up on; parking‑meter implementation delays affected near‑term meter revenue. - The finance team is revisiting a GFOA risk analysis and intends to monitor revenues and expenditures more closely in uncertain conditions.
What the council did: members asked for more detail on tourism's contribution to sales tax and on parking‑meter revenue timing; Reed offered to follow up with further detail. The session was informational; no budget action was taken.
Ending: Finance staff emphasized the city's conservative stance on revenue assumptions and said departments and the mayor's office will continue monitoring fiscal risk and provide more detail as the council finalizes unresolved budget items.
